The new rail freight route opened between Finland and China on 10 November 2017 is doubling the frequency of the service due to increasing demand. Starting in April 2018, Railgate Finland Kouvola-China Express will have weekly departures from Kouvola and Xi’an.

Trains on the new northern route take 10–12 days to complete a one-way journey, whereas a cargo ship takes an average of eight weeks. Thanks to China’s support for the route as part of the One Belt One Road Initiative, the cost of sending freight by rail is now only slightly higher than using a cargo ship. Many Finnish, Nordic and Central European companies are already using the new route.

“From China the freight has so far mostly consisted of consumer goods, different raw materials, machines and equipment, and spare parts. Going in the other direction, the trains have been mainly loaded with forest industry products, raw materials, machinery and project deliveries,” says Simo Päivinen, Development Director for logistics and relocation services at Kouvola Innovation.

Excellent growth prospects

The new route has excellent growth prospects because container rail freight traffic between Europe and Asia is increasing at a rate of 100–150% annually. Railgate Finland Kouvola-China Express also provides a cost-efficient import-export route to third countries like Japan, South Korea, Singapore and Australia.

“It’s not impossible that we will have a daily departure from Kouvola to China in the future. Last year, the volume of container freight rail traffic on the Central European route to Asia was about 350,000 TEU and the forecast for 2020 is already 1 million TEU,” says Päivinen.

Competitiveness boost for Nordic companies

The new rail route offers a whole new Europe-Asia transport solution that can boost the competitiveness of many Nordic companies involved in the import and export trade. It is also opening up new business opportunities in product groups for which air transport has been too expensive, but maritime transport too slow.

“Nordic companies can now compete more effectively with delivery times and logistics. In the case of raw materials trade, this can have an impact on the global markets because delivery times from Northern Europe are now significantly faster than before,” says Päivinen.

New Europe-Asia transport solution to improve competitiveness of Nordic companies

“If the freight source or destination is Central China, it is actually cheaper to use the train instead of a cargo ship because the inland transport costs from Chinese ports are quite high. The new freight route clearly represents a competitive factor for certain products, product groups and industries because it enables savings in transport costs.”

Maintaining the quality of the exports and imports is another important factor.

“For example, sending sawn timber to China by sea can affect the moisture content and quality of the shipment. Sawn timber suppliers are very interested in the new inland route because it removes the problem concerning moisture.”

Growing interest from Central Europe

Companies from outside the Nordic region have already discovered the benefits of the fast route from Finland to Asia. Since the start of the service, every train in both directions has also included some freight from Central European companies.

“We have already noted the increasing interest from Central European customers. The throughput of the Central European route via Poland and Belarus has been affected by the high volume of afreight, so the northern route is ideal for products that need to be delivered on schedule or more urgently,” says Päivinen.

The China Express freight train is 800 metres long, with a capacity of 82 TEU. It is operated by KTZ Express, Kazakhstan Railway’s transport and logistics service provider, whose agent in Finland is Unytrade Oy.

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